TRA 6726 Topic 15

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Returns Processing

Accepting, processing, and sorting customer returns via e-commerce so the customer does not need to visit a store.

Air Carriers -

Expensive relative to other modes but fast •Account for a small portion of total freight hauled •Cannot carry extremely heavy or bulky cargo •For light, high value goods over long distances quickly •Limited in terms of geographic coverage •Half of the goods transported by air are carried by freight-only airlines, like FedEx.

A warehouse management system is a standard system designed to support cross-docking

False

Asset-based 3PLs are brokers or intermediaries who utilize the assets of others to provide services

False

The challenge as a logistician is to evaluate and meet customer's needs at the lowest cost.

False

Logistics' Inflation-suppression Effect

Modern logistics systems have enabled a global economy, lowering price levels by 50% since 1990.

Modal Service Characteristics - Most Ideal Distance / Least ideal distance

Motor / Ship

You currently ship 6 LTL shipments (each weighs about 4,500 pounds) into the region at $400 per shipment. You identify a third-party warehouse operation that is able to unload (and reload) a full truckload for $300. You check with your carrier and discover that the truckload from Las Angeles to Las Vegas is $2,000. LTL delivery from the breakbulk facility to each customer is $150. Your question: Should you change your delivery model?

No

Asset-based 3PL

Own their own trucks and warehouse

The most reliable form of transportation is _____ Pipeline Water Air Rail Trucking

Pipeline

The slowest transportation mode is: a. Trucking b. Pipeline c. Water d. Rail e. Air

Pipeline

Modal Service Characteristics - Best for Greenhouse gasses / worst for greenhouse gasses

Pipeline / Air

Modal Service Characteristics - Most Deliv Reliability / Least Delivery Reliability

Pipeline / Ship

Freight Forwarder or NVOCC

They arrange for transportation across different modes and sell insurance for international shipments. They also sell expertise—expecially regarding export regulations and documentation.

For Warehouse Location, Use a

Total Cost Perspective

Lightweight but bulky

Truck will fill up in volume before weight; you will have to pay full weight.

Amazon's secret to beating Walmart in market share is its superior logistics service.

True

Breakbulk warehouses receive large-volume truckload shipments that are destined for several customers. TrueFalse

True

Countries with better logistics infrastructures and companies with better logistics systems are more competitive. TrueFalse

True

Improving service always costs more money TrueFalse

True

Logistics can be a source of strategic advantage

True

Using a breakbulk facility usually reduces shipping time versus LTL direct to customer. TrueFalse

True

Warehousing allows for economies of scale in production

True

Breakbulk

Unload large shipments and breakdown the contents to go into smaller shipments.

The biggest transportation mode in terms of spending is: a. Rail b. Trucking c. Air d. Ocean e. Pipeline

b. Trucking

The fastest transportation modes are also a. The most polluting b. The most expensive c. The least reliable d. All of the above e. Only a and b

e. Only a and b

To determine whether to use breakbulk warehousing, you compare a. Total cost of direct shipping versus using a breakbulk warehouse b. Identify the right location to minimize total breakbulk costs c. You consider intermodal options d. All of the above e. Only a and b

e. Only a and b

A warehouse management system: e. Only a and b a. Handles all of your day-to-day transactions b. Is connected with your ERP system c. Can be manual or automated d. All of the above

e. Only a and b a. Handles all of your day-to-day transactions b. Is connected with your ERP system

As transportation speeds up a. Transportation cost increases b. The cost of transportation declines c. Lost sales will decrease d. All of the above e. Only a and c

e. Only a and c

High value or Easy to Resell

ill be targeted for theft. Need to disguise and have extra security and/or insurance

Shipping LTL usually takes

longer and exposes your freight to greater loss or damage.

The SCOR Model

plan, source, make, deliver, return

warehouse management system (WMS).

receives and processes orders, directs putaway as well as order picking and packing, tracks inventory, and talks to all of your other IT systems, including your enterprise resource (ERP) system.

Breakbulk warehouses receive large-volume truckload (TL) shipments that are destined for

several customers

As you approach 100% perfection

the costs of service improvements rise more quickly.

Logistics makes sure goods and services are available

when you need them where you need them!

Warehouse

•Generic term for a facility where product is stored

Outsourcing

•Hire someone else to manage the process for you?

Distribution Center

•Often called a "mixing facility"

Transportation Routing

•Pick your routes based on shortest distance, shortest time, or your mode of transportation.

Cross-dock

•Receive incoming products and load on to a waiting trailer mixed with other products.

Breakbulk

•Receive large-volume TL, broken down and delivered using LTL

Customs Warehouse

•Store imported or exported materials in order to delay taxes

Truck Transportation Critical Issues

•The weight that can be placed in the truck •The hours that the truck can operate •The size of the equipment that can be used •The number of hours a driver may work •The training that a driver must have

Modal Choice

•What type of vehicle are you going to use to ship your product to meet customer expectations

Carrier Selection

•Who is your partner going to be? DHL, FedEx, UPS, USPS or someone else

As a value of a product goes up,

, related logistics costs for the product increase.

Characteristics of Transactional Relationship

- Arms Length - Minimal Interaction - Transitory Win "Who Cares"

Economist's View of Logistics

- Time Utility - Place Utility

Value-Added Services in Distribution Centers

1. Breakbulk 2. Mix / Assort 3. Store 4. Free Trade Zone 5. Customization 6. final assembly 7. Returns Processing 8. Repair or Refurbish

In Day-to-Day Operations, Minimize:

1. Distance Traveled 2. Unnesessary Movement 3. Wasted Space

Transportation Decisions`

1. Modal Choice 2. Carrier Selection 3. Transportation Routing 4. Outsourcing

Logistics Create Value Through. . .

1. Movement 2. Storage 3. Processing

The Seven Rights of Logistics

1. Right product to the 2. Right customer 3. At the right time 4. In the right condition 5. In the right quantity 6. At the right place 7. For the right cost

Types of Relationships in Shipment

1. Transactional 2. Cooperative 3. Strategic Collaboration

Driver of Transactional Relationship

Cost / Price

Non-asset-based 3PL

Do not own—act as brokers or intermediaries

Customs Brokers

"import connection." A customs broker is responsible for knowing all of the relevant rules and regulations from the point of origin through to the destination. Customs brokers know the right people at the right government agencies to help avoid or resolve shipping problems.

The most polluting mode of transportation is: a. Trucking b. Air c. Water d. Rail e. Pipeline

Air

Modal Service Characteristics - Best Transit Time / Worst Transit Time

Air / Pipeline

Modal Service Characteristics - Most Cost / Least Cost

Air / Pipeline

If you need help handling occasional shipping to certain areas, what would be a good type of relationship to have with a 3PL? a. Partnership b. Transactional c. Cooperative d. Strategic Collaboration

B. Transactional

FOB Destination who pays the carrier

Buyer

FOB Origin Responsible Party

Buyer

If a breakbulk strategy makes sense, you need to identify the right location to place the breakbulk facility to maximize total costs. TrueFalse

Flase

Place to store imported goods so you don't have to pay customs/duties until they are removed from the DC. If re-exported, you can avoid duties altogether.

Free Trade Zone

Intermodal transportation: Is a good idea that is not executed well Has to be between rail and truck Grew rapidly with the invention of containerization Is tough to deal with because containers are not standardized

Grew rapidly with the invention of containerization

Hold inventory securely until it is needed.

Hold

Water Carriers-Carriers-

Inexpensive, slow & inflexible. Includes inland waterway, coastal & intercoastal, & deep-sea. •Inland waterway transportation is used for heavy, bulky, low-value materials (e.g., coal, grain) •Development in deep-sea transportation and use of supertankers & containerships have made water transportation cheaper and more desirable •Competes w/rail & pipeline •Water carriers paired w/trucks for door-to-door delivery

Combing multiple modes is known as

Intermodal transportation The practice of combining transportation modes while moving products. .

An example of how product characteristics influence transportation is that if a product is high density ________ It is heavy for the space it takes up, and will maximize the weight allowed when the trailer is not very full by volume It will move slowly because it is heavy The truckload shipment will be very heavy, and you will have to pay more It can only be shipped via rail

It is heavy for the space it takes up, and will maximize the weight allowed when the trailer is not very full by volume

Final Assembly

Putting a bicycle together before shipping to a customer.

FOB Destination Responsible Party

Seller

FOB Origin who pays the carrier

Seller

Mix/Assort

Take a variety of products from different places, mix them into one shipment and ship them out together.

Logistics is:

That part of supply chain management that plans, implements, and controls the efficient, effective forward and reverses flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet customers' requirements.

For Long-term Efficiency, Employ

The Right Technology

High Density

The truck will not be very full when it reaches full weight

Easily damaged

Will probably have to pay more for protective packaging, extra care in handling

Characteristics of Strategic Collaboration Relationships

Win - Win Drive : Innovation - Trust Enabled - Resources Comingles - Gain Sharing - Long Term

Characteristics of Cooperative Relationships

Win - Win Driver: Scale - Joint Planning - Frequent Interaction - Information Intensive - Value Added Service - Long Term

Logistics' Poverty-alleviation Effect

Xavier Sala-i-Martin, Columbia University economist, has noted that since 1970, the "percent of people living on a dollar a day or less—a traditional poverty measure—has fallen by 80%.... This is the greatest antipoverty achievement in world history."

What are the key activities in logistics? a. Movement, storage, and processing b. Returns, reuse, and recycling c. Managing customer payments, returns, and credits d. All of the above are equally important e. None of the above

a. Movement, storage, and processing

Visibility is a critical aspect in which of the following key logistics activities? a. Processing b. Value-added c. Rail d. Returns and reuse e. None of the above

a. Processing

The last mile shipping is: a. Shipping directly to the customer's door b. The fastest growing area in shipping c. A very profitable business d. All of the above e. Only a and b

a. Shipping directly to the customer's door b. The fastest growing area in shipping

Logistics inefficiency hurt Twinkies because _____ a. Twinkies had a short shelf-life, so could not be stored for long b. Logistics costs associated with Twinkies was extremely high versus the industry c. Theft of Twinkies was very high d. Both a and b

a. Twinkies had a short shelf-life, so could not be stored for long b. Logistics costs associated with Twinkies was extremely high versus the industry

As the value of a product increases, which of the following is also true from a logistics perspective? a. Sales will increase b. Inventory costs will increase c. Warehousing costs decrease d. All of the above e. None of the above

b. Inventory costs will increase

Which of the following is true about breakbulk warehousing? a. It is obsolete due to e-commerce growth b. It entails unloading large shipments and breaking down the contents to go into smaller shipments c. It includes mixing different product together and shipping them out d. All of the above are true e. Only b and c

b. It entails unloading large shipments and breaking down the contents to go into smaller shipments

What type of 3PL relationships are win-win, driven by scale, and characterized by joint planning and value-added services? a. Partnership b. Transactional c. Cooperative d. Strategic Collaboration

c. Cooperative

Rail Carriers

compete when the distance is long & the shipments are heavy or bulky •Slow & inflexible •New - purchasing motor carriers to offer point-to-point pickup & delivery service known as trailer-on-flatcar (TOFC) service •One trend is use of high-speed trains which range in the U.S. from 85 to 120 miles per hour

Less-than-truckload carriers

consolidate smaller loads from multiple customers to fill a trailer and achieve shipping economies.

Hold semi-finished products until an order is received then customize to customer specifications before shipping out

customization

A free trade zone warehouse is: a. A type of value-added warehousing service b. Allows companies to store imported goods so you don't have to pay customs/duties until they are removed from the DC c. Allows you to avoid duties altogether for goods you import and re-export d. All of the above

d. All of the above

Objectives of using a 3PL include which of the following? a. Minimize costs b. Deliver maximum service to customers c. Reduce the hassle of dealing with repetitive detailed activities d. All of the above e. Only a and b

d. All of the above

The following are basic rules of warehouse layout: a. Minimize waste of all types b. Vary the layout based on the type of warehouse (breakbulk, cross-dock, etc.) c. Minimize unnecessary movement d. All of the above e. Only a and b

d. All of the above

Which of the following are NOT among the seven rights of Logistics? a. Right time b. Right place c. Right cost d. Right transportation mode e. All of the above are part of the seven rights

d. Right transportation mode

Truckload carriers offer

direct door-to-door service between two locations for a single shipper

Repair or Refurbish

doing basic repairs on returned items or trade-ins, like cellphones, and creating refurbished units for resale or warranty replacement.

Modal choice affects: a. The type of vehicle used to ship your product b. Meeting customer transport expectations at the lowest cost c. Transportation service characteristics d. Costs of the transportation system e. All of the above

e. All of the above

Third-party logistics providers may help with the following activities: a. Transportation planning b. Electronic Data Interchange c. Visibility d. Warehousing e. All of the above f. Only a and d

e. All of the above


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